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Overview of the current stadium debacle

Discussion in 'Chargers Fan Forum' started by Blue Bolt, Jan 16, 2015.

  1. Blue Bolt

    Blue Bolt Persona Non Grata

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    San Diego Chargers Stadium Update: Hoteliers vs. Spanos
    By Jeff Siniard


    In his inaugural State of the City address, Kevin Faulconer explicitly (and correctly) states that the risk of the Chargers moving to Los Angeles has never been greater. In response, he unveils... a plan for a task force! In response, the Chargers have sulked on the corner, and told everyone who to blame if/when they leave San Diego.

    Faulconer's plan is to basically do the following:

    • Announce the formation of a task force (done 1/14/15).
    • Identify the members of the task force by the end of January.
    • Study the Qualcomm site, as well as a downtown site, and determine which site is more feasible.
    • Study the financing options for both sites, and determine which is more likely to provide the maximum return on investment and the minimum impact on taxpayers.
    • Announce a completed plan in Fall 2015.
    Here's a link to the text of his speech.
    Task forces are awesome for politicians, for one main reason; as Scott Lewis' article in Voice of San Diego points out - it allows the politician to present the illusion of taking action on an important issue without actually doing anything about it.

    I can't convey how disappointing this announcement is. The city of San Diego has known the Chargers wanted a new stadium since 1995. The lease was renegotiated in 2003, which is when the last Task Force on Chargers' Issues took place. The maintenance issues with Qualcomm were documented then. The Chargers have floated several ideas (but nothing serious) since 2004. There's nothing this task force is going to discover that we don't already know:

    • Qualcomm is antiquated and falling apart. In fact, the Chargers have played more consecutive home games in Qualcomm than any other team in the NFL (yes, including the Packers).
    • Qualcomm Stadium (following the 1995-1997 expansion) is too big, by about 8,000 - 9,000 seats.
    • A new stadium is going to be very expensive, about $1 billion.
    • San Diego doesn't have the corporate or media base that Los Angeles does, which means full private financing is extraordinarily unlikely.
    • The Spanos family doesn't have the wealth to take on a majority of construction costs, which why the only way they can get a privately funded stadium is to move to Los Angeles.
    • San Diego can't afford to build its own stadium.
    • San Diego wants to have a public vote.
    Now, a few key points.
    First, the city may not be able to wait until November 2016, or even the June 2016 primaries, for a public vote. The Chargers have an out in their lease every year, which can be activated anytime between February 1st and May 1st. If the Chargers decide they have to take their shot at Los Angeles during this window in 2016, that means the city will have to hold a special election during that timeframe - as pointed out by XX 1090's Marty Caswell in this post. This means the plan has to be delivered on-time and sold hard. If this scenario plays out, nothing the Chargers say or do could help this as much as making a deep playoff run next season.

    Second, everyone is talking about increasing taxes to cover any public contribution. The most likely target is the Transient Occupancy Tax (TOT), which is paid by people who stay at hotels in the city. Unfortunately, as San Diego's hoteliers were re-educated recently, you must have a public vote and a 2/3rds supermajority in favor to increase any taxes for specific purposes (such as convention center expansions, or new stadiums).

    I can't stress this point enough - any proposal requiring a 2/3rds supermajority of voters is dead on arrival.

    Third (and this shouldn't be surprising), as soon as Faulconer's comments went public, Chargers' Special Counsel Mark Fabiani dismissed the mayor's comments virtually out of hand. I find Fabiani's comments amusing, as the Chargers have thrown a lot at the wall over the last 12 years, with very little sticking because they haven't made a proposal which can be taken seriously either. If anything, Fabiani's comments only serve to make a bad situation worse, and could well be interpreted as coming from a team which has already made its decision and is playing out the string. People living in glass houses shouldn't throw stones. But, in the Chargers' case, it got even worse...

    Chargers Obstinance?
    Furthermore, in the day following Faulconer's speech, Fabiani made no bones that the Chargers were dubious regarding the Task Force's prospects for success, both in an interview on Darren Smith's XX1090 radio show, and later in a Q & A on the Chargers' stadium site.

    "So hopefully the community will understand our disappointment when the one and only specific stadium initiative the Mayor announced in his State of the City speech was the appointment of Steve Cushman to be in charge of devising a financing plan"

    Mark Fabiani, in an article on Chargers.com from 1/15/15

    Steve Cushman happens to be the main guy working on the Convention Center expansion in San Diego. Now, here's the part of Faulconer's speech which mentions Cushman:

    "The convention center is critical to our region's success. Events like Comic-Con bring millions of visitors to our city, and showcase San Diego to the world. Expanding the convention center will create thousands of jobs and bring millions of dollars in additional revenue for our neighborhoods. During this year of action, my Convention Center Expansion Special Advisor, Steve Cushman, will continue to lead on this effort"

    Kevin Faulconer's State of the City Address 1/14/15.

    Notice anything funny here?

    Fabiani is implying that Cushman is devising a financing plan for the stadium, whereas Faulconer's speech mentions Cushman in connection with the Convention Center.

    In interviews with both Faulconer and Cushman on Scott & BR's XX1090 radio show Thursday afternoon, both Faulconer and Cushman explicitly denied that Cushman was part of the stadium team now, or that he will be part of the stadium task force to be announced soon.

    This makes no sense - until you remember that the Chargers are working on a stadium with additional convention center space, which is not connected to the Convention Center. The people (i.e. hoteliers) who support the convention center expansion want a contiguous expansion.

    It means that, at the moment, Faulconer views the Chargers' new stadium and the Convention Center as separate projects, which is not how the Chargers wish to proceed.

    Furthermore, Fabiani characterized Cushman as one of the primary opponent's to the team's efforts to get a stadium built in San Diego, whether in Chula Vista, at the 10th Avenue Marine Terminal, and now as there are competing Convention Center plans. While it may (or may not) be true that Cushman has been a foil to rank with Bruce Henderson and Mark Aguirre - Cushman did concede that he opposed any stadium efforts at the Marine terminal during his interview on the Scott and BR show - it's also the set-up for a convenient scapegoat in the event things don't work out.

    This is about one thing. This is a competition for public money, and it's pretty clear the Chargers believe there's only enough money for one project - and right now, it's not theirs.

    This, in a nutshell, is why San Diego can't ever get the hell out of its own way.

    Paying for a New Stadium
    As we've done before, and as we'll continue to, let's take a look at how a stadium might be paid for. As always, these are my estimates.

    • Chargers contribute $200 million.
    • NFL contributes $200 million from the G4 Stadium Loan Program.
    • Naming Rights - $150-200 million. I'll use $150 as my estimate, although I think it's extremely conservative. However, no one seems to mention naming rights in cost discussions - and my guess is that the Chargers are hoping to get that money to pay back their initial investment. If the Chargers insist on getting the naming rights for themselves, there's no way this can be done without raising taxes.
    Assuming they don't insist on the money for the naming rights, the total so far: $550 million. $450 million more needed. This is unfortunately where public money / assets come into play.
    • Selling the Qualcomm and Sports Arena sites for $300 million OR leasing the land at low cost to a private developer who then contributes $300 million to the stadium project.
    As you can see, we're sitting at about a $150 million shortfall. This is where I'm going to propose a few different ideas to raise the remaining money, maybe even a combination of the ideas below:
    • NFL provides additional money for the project in exchange for the Chargers agreeing to forfeit claims on the Los Angeles market.
    • Use of Personal Seat Licenses (I know Fabiani has said this idea wont work, but hear me out anyway). I'd suggest a $5,000 PSL for all luxury box and club seats (around 10,000 seats total - $50 million from those who can afford it and probably don't care about paying it). Then a $2,000 PSL for the most valuable 25,000 General Admission seats (also likely to be affordable to those who'd buy those seats anyway).This example would generate $100 million in revenue alone and at least partially satisfy the "let the fans pay for it" segment of the population. Secondly, those fans without money up front could always finance their PSLs - check out the pricing map for Levi's Stadium.
    • A Memorandum of Understanding (MOU) bond proposal for general redevelopment, with the city and county paying equally, and thereby avoiding the 2/3rds supermajority requirement. This is how Proposition C (Petco Park) passed with about 60% of the vote.
    • Raising the TOT by a sufficient percentage to cover the additional costs of building a stadium, with the taxes going to the General Fund, then simply paying for the stadium from the city's General Fund. Tax increases for the General Fund do not require a 2/3rds supermajority.
    In Closing
    Clearly, San Diego is nowhere close to being ready to make a competitive stadium offer to keep the Chargers. The soonest we can expect such an offer is anytime in the next 9-12 months. There's also considerable discord among the people who have to work together in order for any reasonable plan to come together, and not much time to work it out.

    This is about greed. The battle is currently being waged between San Diego's hoteliers and the Chargers. Who wins this battle will largely determine whether professional football remains in San Diego.
     
    • Informative Informative x 2
    • Agree Agree x 1
  2. House of Hayne

    House of Hayne Chargers Smash

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    That looks and sounds great for us
    (Heavy scarcasum)
    Eyes rolling
     
  3. Pointyearedog

    Pointyearedog I only put idiots on ignore...

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    So, they are stating basically that the city should just flip a coin?
     
  4. House of Hayne

    House of Hayne Chargers Smash

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    No they are telling us to go f-yourself
    With a smile:sneaky:
    Well if that can't happen and they move it will save me money every year
     
  5. Ride The Lightning

    Ride The Lightning Join the Dark Side, we have cookies.

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  6. Fossil

    Fossil BoltTalker

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    A decent run into the playoffs in 2015 will focus everyone's attention and efforts into taking all the best ideas and forming a solid, workable plan. A Super Bowl appearance or, dare I say, victory the following year will have everyone comparing color swatches for floor tiles. This is all in the Charger's hands, always has been.
     
  7. Fouts

    Fouts I heart Deano!

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    Listening to Fabiani, he said that basically San Diego needs to build them a stadium, with NFL loans, city money, Spanos money, otherwise, the Chargers will have to consider what is best to protect their "business." I am guessing this is code for, if there is not a stadium built in SD (however done) we will move the team, presumably to LA. I don't see the citizens of LA voting to help build the Chargers a stadium either. Only reason a stadium can possibly be built in LA now, is because Stan Kroenke is gonna build it himself. The only threat I see is if that happens, the NFL allows Rams to move, and Kroenke allows Chargers to pay rent as co-tennants.
     
  8. Pointyearedog

    Pointyearedog I only put idiots on ignore...

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    It's all in the future, whatever happens will happen then.
     
  9. HEXEDBOLT

    HEXEDBOLT Don't like it, lump it!!!

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    The city needs to stop all the hogwash and just come out and say they don't want a new stadium in San Diego, why keep up the charade??????.
     
    • Like Like x 1
  10. Savage Lizard

    Savage Lizard Charger fan at 7000'

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    I will say this: I will never pay for a PSL. As soon as a PSL gets slapped onto my season tickets, I'm done. Just philosophically it pisses me off, I won't pay for the right to pay for seats.
     
  11. House of Hayne

    House of Hayne Chargers Smash

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    Wtf is a psl
     
  12. Fossil

    Fossil BoltTalker

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    PSL = restaurant shorthand for pizza slice. It's a sucker deal. I'd never pay for one either.
     
  13. Concudan

    Concudan Caffeinated Commando

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    Personal Seat Licenses. A lot of new stadiums are using them to fleece more money from the season ticket holders.
     
  14. HEXEDBOLT

    HEXEDBOLT Don't like it, lump it!!!

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    Is that with or without the personal blessing of the local government????????
     
  15. Concudan

    Concudan Caffeinated Commando

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    I there any seats without the blessing of the local government?
     
  16. Carlsbad_Bolt_Fan

    Carlsbad_Bolt_Fan Well-Known Member

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    It's basically a fee you pay that gives you the right to buy season tickets. Teams who use them (Dallas, SF, Houston, Carolina, NY Giants & Jets, etc.) pitch it to you as if you actually own those seats. That they're actually "assets" you control and can sell freely to other people. You still pay your yearly season ticket fees though.

    The 49ers called them "Builders Seat Licenses". Some were in the 5 & 6 figure range. For example, in SF's case, you'd pay a one time fee of $10,000 per seat. Then you'd pay your season ticket cost. Some teams also let you finance that PSL over a 5 year period, paying interest of course as if it were a loan. Fail to make your payment? You lose your seats.

    Dallas & SF really gouged their ticket holders too. In their old stadiums, they had no PSL's & tickets were somewhat reasonably priced. You had season ticket holders that had their seats for decades. Then they see what it'll cost for the new stadium. Many walked away. But in the end, SF is 100% season ticket holder. Think Dallas is too.
     
  17. Carlsbad_Bolt_Fan

    Carlsbad_Bolt_Fan Well-Known Member

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    Minnesota fans really got jobbed here. Once the financing was done for the new stadium, the Vikings announced that fans would have to pay between $600-$9500 in PSL's, depending on where your seats are. Those PSL fees will raise $100 Million.
     
  18. House of Hayne

    House of Hayne Chargers Smash

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    F that
    If that happens with a new stadium
    I'm not going to be a season ticket holder and then a few years later
    When the psl goes away I'll get them again
     
  19. House of Hayne

    House of Hayne Chargers Smash

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    That's total bull$hit
     
  20. House of Hayne

    House of Hayne Chargers Smash

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    For that kind of money I should get a few shares in charger stock not the right to give more money to get the seats I should already own
     
    • Agree Agree x 1
  21. OP Bolt

    OP Bolt BoltTalker

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    Just don't see any outcomes favorable to San Diego Chargers fans.
    - Right now it is clear (to me) that the city's desires for a convention center expansion (valuable in its own right) is fighting for the same pot of money as the new stadium effort. It also seems clear to me (and probably the Chargers) that a in the city's eye, a new stadium and a convention center expansion are not synonymous, that the convention center expansion is higher on the city's priority list and the city views it as a better return on investment. Frankly, looking at the way the NFL currently views stadiums as having only about a 20 year life before they become "inadequate", that is a hard position to argue against.
    - I don't understand why this has always remained a "city" issue. I would assume that a significant portion of the Chargers season ticket holders live in the county, not in the city, and are completely disenfranchised from this process. It seems to me that common sense would try to harness the buying power of 3.1 M in the county vs. 1.3 M in the city. That would suggest the formation of a multi-jusrisdictional organization (e.g, the Port Authority) to find a location and funding.
    - Where is SDSU going to play when Qualcomm is declared unsafe? Would it make economic sense to try and get a portion of the funding from the state, which, presumably would be less than a stand-alone stadium? OK - stop laughing.
    - Regarding the Chargers going to LA - it seems to me, if the Spanos family wanted to/could afford to move to LA they would have already made it happen. I think that LA presents them with some unpalatable choices. THEY ARE NOT RICH ENOUGH ! It looks to me like they would have to sell a significant/perhaps controlling portion of the team. Of course, with no stadium deal in SD, they have to do something. I'm actually surprised that we haven't seen some sort of trial balloon from Orange County.
    - New ideas? - now that Chula Vista is taking over the Olympic training center how about a re-look at CV? I never did understand why the bayside location didn't work - it had highway and easy trolley access. If OC provides so much fan support, why not relook at North County locations? What about further east (El Cajon, Santee, ...)?
     
  22. HollywoodLeo

    HollywoodLeo Well-Known Member

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    PSLs seem like the biggest ripoff in all of sports. I definitely wouldn't buy season tickets with them.

    I'd much rather take my chances at buying individual tickets for every game if I was in a position to attend all of them and had the money.

    Hell, for 4 digit price tags just to have the privilege of paying another at least almost 4 digits you'd probably get "season tickets" cheaper buying them individually one at a time resale through StubHub.
     
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  23. ChargerMike

    ChargerMike BoltBruthaFromAnuthMutha

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  24. House of Hayne

    House of Hayne Chargers Smash

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    Looks good but no parking
     
  25. Pointyearedog

    Pointyearedog I only put idiots on ignore...

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    Is it next season yet?
     
    • Optimistic Optimistic x 1
  26. HollywoodLeo

    HollywoodLeo Well-Known Member

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    Parking will always be an issue with downtown stadiums.
     
  27. HollywoodLeo

    HollywoodLeo Well-Known Member

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    Sorry, but this isn't entirely accurate.

    They have a buyout option to get out of the lease at the Q that gets cheaper every year. So every year that passes by that they don't yet move elsewhere (be it LA or anywhere else) makes it a cheaper decision to leave.
     
  28. Fouts

    Fouts I heart Deano!

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    If they move, it won't be LA they need public support ($$), and 2/3rds vote, not gonna happen. If it is presumed that they do not want to sell the team, or major controlling interest in the team. However, maybe outta state somewhere desperate for an NFL franchise, with less political restrictions, obstructions to publically financing a stadium. I'd vote for a stadium initiative here, just don't see it getting 2/3rds vote.
     
  29. House of Hayne

    House of Hayne Chargers Smash

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    Don't think it was downtown
    The lot was too big to be where the downtown plot of land is
     
  30. HollywoodLeo

    HollywoodLeo Well-Known Member

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    I was just assuming because that's where most of those CGI renditions are, but I also didn't look too closely.
     

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